Adaptation Finance Slump, Bonn Breakthrough, Climate Vulnerability Index, and More

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Global climate finance surged to a record US$1.9trn in 2023, but adaptation flows slipped to just US$65bn — down nearly 16% year-on-year — according to new analysis by the Climate Policy Initiative (CPI).

This is far below global needs, with the non-profit estimating that emerging markets require US$222bn a year on average from 2024 to 2030 to properly climate-proof themselves, and US$248bn (in 2023 dollars) beyond 2030.

A US$20bn drop-off in financing supplied by the China Development Bank accounted for the bulk of the yearly decrease, caused primarily by currency depreciation and changes in how adaptation finance is classified. This was partially offset by a surge in adaptation-related flows from green bond issuances, which rose by US$7.9bn to hit US$18bn total in 2023. Three-quarters of these green bond flows were attributable to sovereign issuers, reflecting how adaptation remains largely a public endeavor. Indeed, 90% of tracked adaptation finance came from public sources in 2023.

The CPI says tracking adaptation finance remains challenging because of classification difficulties and data gaps — particularly when it comes to private finance. “Identifying private adaptation investments partly relies on private providers designating their own investments as adaptation finance, which can easily be misclassified as general risk mitigation, weather-proofing, or asset maintenance,” the report reads. 

One positive development is the rise of so-called “dual benefit” finance, intended to achieve decarbonization and adaptation goals in tandem. These flows reached US$58bn in 2023, triple the amount in 2018. The majority went towards agriculture, forestry, land use, and fisheries, as well as water and wastewater.

Heading into the COP30 climate summit in Brazil later this year, the CPI says efforts should be targeted on improving the quality — not just the quantity — of climate finance, for example by setting a “common language” and frameworks for assessing the long-term systemic changes it can bring about.

The Fourth International Conference on Financing for Development is taking place in Seville this week, aiming to advance climate finance even as the US takes steps to dilute its agenda. The meeting seeks to address debt reform and enhance climate resilience financing. Brazil, the upcoming hosts of COP30, plan to take the lead on climate finance, while the Vatican and others spearhead efforts on debt restructuring. A draft outcome document commits participating countries to “urgent actions to adapt to and build resilience against climate impacts.” (UN Department of Economic and Social Affairs)

Targeted reforms to Basel III banking regulations could accelerate private climate finance flows to emerging markets and developing economies (EMDEs), according to the International Chamber of Commerce (ICC). Current interpretations of Basel rules hamper lending by overstating country-level risks and failing to recognize credit-boosting tools used by sovereign governments. The ICC recommends technical adjustments, such as updating credit risk mitigation guidance and adopting dynamic risk weights for project finance, to unlock further investments without compromising financial stability. (International Chamber of Commerce)

The UN Secretary-General’s Expert Group on Debt has published 11 recommendations on tackling the escalating sovereign debt crisis threatening sustainable development across the Global South. The report calls for reforms at multilateral, regional, and national levels. Proposals include revamping the G20 Common Framework to speed up debt restructurings, normalizing debt service pauses during crises, and expanding innovative tools like debt-for-development swaps. Global South debt servicing costs are soaring — in 2023, 38% of developing nations, nearly half of which are in Africa, spent over 10% of their revenues on interest payments. (United Nations)

A Royal Bank of Canada report warns that soaring costs from extreme weather are driving a shift in corporate focus from climate change prevention to adaptation. The Canadian lender says the costs of climate shocks hit US$368bn last year, 14% higher than the long-term average. With global temperatures on track to rise 2.7°C by 2100 under current policies, this price tag is only expected to increase. The report points to growing opportunities for firms offering resilience solutions, from catastrophe bonds and ESG-linked insurance to climate tech and infrastructure engineering. (The Canadian Press)

The UN climate talks in Bonn wrapped up with a last-minute deal between countries on a way forward for tracking progress on climate adaptation.

The agreed-on text, published last Thursday, asked a technical expert group to whittle down a provisional list of 490 adaptation indicators to “no more than 100” — all of which should be “globally applicable”. The final set should include indicators for tracking adaptation finance and for “enabling factors”, meaning the actions, expertise, and technology transfers that help countries achieve their adaptation goals. However, the text did not specify that the finance indicators monitor flows from rich countries to developing countries, but simply between “parties” — to the disappointment of poorer nations.

The indicators are to be categorized across seven thematic and four cross-cutting dimension targets that contribute to the Global Goal on Adaptation (GGA), covering everything from climate-resilient health systems to early warning coverage and food security.

“The GGA negotiations at Bonn were a very tiring and bruising process — but there is now agreement on a way forward,” Debbie Hillier, Head of the Zurich Climate Resilience Alliance programme for Mercy Corps, who was on the ground at Bonn, told Climate Proof.

The expert group must ensure all indicators are “measurable” and clearly adaptation-relevant. They are also instructed to develop sub-indicators tailored to different national contexts, which can be used by countries to supplement their reporting against the global indicators.

The reworked list is to be submitted to UN negotiators in August, when the decision-making over the final set will be taken up by diplomats in the run-up to COP30. 

The at-times contentious debate left some countries feeling bitter. Notably, efforts by the UK and Canada to alter the text on the “means of implementation” indicators, which cover finance, were labeled “disturbing” by the African Group of nations. Towards the end of negotiations, India also complained about rushed decision-making on the final text, which was posted online while the closing plenary session was already underway. 

“Parties were able to avoid a total log jam in Bonn, and managed to chart a way forward on the indicator selection process,” said Cristina Rumbaitis del Rio, adaptation and resilience advisor at the UN Foundation. However, she warned that “much more work” would be needed to find common ground on other adaptation elements under the Paris Agreement, including on a new goal on adaptation finance. “This leaves a lot of heavy lifting to be done in Belem at COP30,” she said.

Nearly 200 countries agreed in Bonn to raise the UN climate body’s core budget by 10% to €81.5mn (US$95.5mn) for 2026-2027, in a show of support for continued multilateral climate action amidst geopolitical tension and the Trump administration’s isolationism. China’s share will rise to 20%, reflecting its economic heft, while Bloomberg Philanthropies will step in for the US, which remains absent from negotiations. The funding boost offers a lifeline to the climate body as it grapples with chronic shortfalls that have forced cost-cutting, even as other UN agencies face deep budget cuts. (Reuters)

The Trump administration is being sued by a coalition of nonprofits, Tribes, and local governments for terminating the Environmental Protection Agency’s US$3bn Environmental and Climate Justice grants, which were mandated by Congress under the Inflation Reduction Act. The legal challenge, led by groups including Earthjustice and the Southern Environmental Law Center, seeks nationwide reinstatement of the grants, which supported projects ranging from flood mitigation and air quality monitoring to urban tree planting and lead pipe replacement in vulnerable communities. (Southern Environmental Law Center)

House Republicans have moved to partially revive the Federal Emergency Management Agency’s (FEMA) Building Resilient Infrastructure and Communities (BRIC) program, countering Homeland Security Secretary Kristi Noem’s effort to scrap it earlier this year. The amendment, led by Nevada Republican Mark Amodei, would make BRIC mandatory but narrow its scope to core infrastructure, cutting out projects tied to climate and equity priorities. Moreover, the proposal would tighten eligibility to states with major disasters in the last four years, raising concerns from Democrats that some states will be excluded. (E&E News)

The European Council has proposed narrowing the scope of the Corporate Sustainability Reporting Directive (CSRD) by limiting application to firms above €450mn (US$527mn) turnover and 1,000 employees. This is markedly higher than the European Commission’s initial €50mn (US$59mn) threshold. Meanwhile, the European Financial Reporting Advisory Group — responsible for crafting the reporting standards used under the Directive — has recommended cutting the number of CSRD datapoints by more than half. The Directive instructs companies to disclose detailed information on their climate adaptation and mitigation efforts, alongside other sustainability topics. (Real Economy Progress)

Nearly one-third of Tuvalu’s population has applied for a new climate visa to Australia, as the threat of rising seas to the low-lying Pacific nation comes into focus. More than 3,000 Tuvaluans entered a ballot for 280 annual migration spots offered under the 2024 Falepili Union pact, a first-of-its-kind agreement granting climate-affected citizens a path to resettlement. While hailed as a model for future climate migration policy, the scheme has sparked fears of a brain drain that could weaken Tuvalu’s social and economic fabric. (Australian Broadcasting Corporation)

Global reporting standard-setter the IFRS Foundation has released new guidance to help companies provide clearer, more consistent disclosures on their climate mitigation and adaptation efforts. The new resources are targeted at companies implementing IFRS S2, part of its ISSB Sustainability Disclosure Standards. The document aims to reduce fragmentation in reporting on transition plans by building on the UK’s Transition Plan Taskforce work and tailoring it for global use. (IFRS Foundation)

Researchers have created a new tool that ranks 188 countries by the climate hazards and their ability to access adaptation finance.

The Climate Finance Vulnerability Index, produced by the Columbia Climate School with support from the Rockefeller Foundation, is an interactive data dashboard that identifies the countries most at risk from cascading climate and economic shocks. It spotlights 65 “Red Zone” nations — home to two billion people — that have high climate risk exposure and low access to finance. Forty-three of these high-risk countries are in Sub-Saharan Africa.

Unlike traditional climate risk datasets that rely heavily on GDP, the new index incorporates a broader set of indicators to gauge vulnerability — including debt-to-exports ratios, fiscal stability, and external reserve adequacy. The result is a multidimensional view of where adaptation finance is most urgently needed. Users can toggle between ‘optimistic’ and ‘pessimistic’ scenarios at the 2050 and 2080 time horizon to see how climate vulnerability varies depending on future emissions levels, population growth, and international policy progress. 

Columbia says the index could be used by governments, development finance institutions, and public and private investors to prioritize capital flows and maximize the impact of each adaptation dollar.

“A donor interested in funding climate adaptation and resiliency would like to see their contribution have the maximum impact possible,” said Gautam Jain, a senior research scholar at Columbia University’s Center on Global Energy Policy and the index’s co-creator. “The index can help the donor pick between two countries that face similar climate disaster risks based on where their funds can go further, as the index explicitly includes a separate dimension covering each country’s ability to access financing.”

Early 2025 data suggests continued sluggishness in venture capital investment in climate tech, after falling for the third straight year in 2024. Deal value last year was down 21.7% to US$37.8bn relative to 2023, while deal count slipped 11.3%, according to PitchBook’s latest analysis. (PitchBook)

Pano AI, an AI-powered wildfire detection company, has raised US$44mn in Series B funding to scale efforts to combat wildfire risks. The round, led by Giant Ventures with backing from Liberty Mutual and Tokio Marine, will help accelerate deployment of Pano’s technology, which now covers nearly 30 million acres globally and services utilities, emergency managers, and communities building climate resilience alike. (Pano AI)

Japan launched the dual-purpose GOSAT-GW satellite on June 28, designed to deliver high-resolution data on greenhouse gases, sea surface temperatures, and precipitation. The device is intended to bolster global climate monitoring efforts, and supply users like the US’s National Oceanic and Atmospheric Administration (NOAA) with essential climate risk data. (Space.com)

The African Union has launched the new Space for Early Warning in Africa (SEWA) initiative, which is intended to improve the continent’s capacity for space-based climate early warning services and enhance disaster preparedness. Through the initiative, African nations plan to increase key institutions’ access to real-time satellite data for forecasting hazardous events, and help in the production of high-quality earning warnings at the country and community level. SEWA was initiated as a partnership between the African Union Commission, the European Centre for Medium-Range Weather Forecasts (ECMWF), and the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT). (Space in Africa)

University of Hawaiʻi researchers have launched a new climate tool enabling site-specific climate reports to enhance wildfire and drought planning. The tool’s integration with 66 operational stations from the 110-strong Hawaiʻi Mesonet network provides real-time data crucial for predictive modeling. (University of Hawai’i)

The ClimateTech Connect conference will reconvene in Washington, DC on April 8–9, 2026, after a successful inaugural event earlier this year. The summit will bring together leaders in insurance, finance, and technology to forge partnerships critical for climate adaptation. (ClimateTech Connect)

Private investments in climate change adaptation are increasing in Europe, although sectoral differences remain (Communications Earth & Environment)

Systematic global stocktake of over 50,000 urban climate change studies (Nature Cities)

Right size, right place: Scale-dependency of managed realignment to mitigate flood hazards in urban estuaries (Environmental Research Letters)

Climate adaptation: Harnessing tech-driven resilience to create sustainable value (Capgemini Invest)

From risk to resilience: How insurance can mobilise disaster finance and climate investment in vulnerable economies (Insurance Development Forum)

The insurability imperative (Howden)

Building capacity to identify and assess nature-related financial risks (Cambridge Institute for Sustainability Leadership)

Nature-based solutions: The Rebalance Earth guide to practical infrastructure for a changing world (Rebalance Earth)

Adaptation planning for business — navigating uncertainty to build long-term resilience (WBCSD)

Thanks for reading!

Louie Woodall
Editor